Baidu, China’s largest search engine, is positioning itself to become a juggernaut in mobile search. Last year, mobile Internet users in China overtook PC-based, and now 50% of revenue comes from Baidu mobile. Building on this financial base, Baidu is investing heavily in the development of Baidu mobile search technology which could have applications in markets far beyond China’s borders.
Coming relatively late to the digital revolution, China is leap-frogging many older industrial nations in its adoption of the latest technology. Today, 23% of the world’s 2.8 billion Internet users live in China, and more and more they are accessing the Internet through mobile devices. In 2014 China counted 1.3 billion mobile subscriptions, including 513 million smartphone registrations, which grew by 21% last year.
Baidu management has taken due notice. Robin Li, founder of the firm (and one of China’s richest men) has firmly set Baidu on the mobile path:
"Baidu is redefining the search box by building an ecosystem to connect people with services and drive closed-loop transactions. Baidu's platform is comprehensive and robust, and we plan to fully exploit the huge growth potential ahead … by leveraging our Baidu mobile foundation, exceptional technology advantage, and proven operational experience."
Amplifying on this statement, a Baidu spokesperson said, “We’re definitely a mobile company first now and everything we do begins with mobile and takes priority over our PC products.”
Currently this mobile strategy seems to have two components – investing heavily in mobile-related technology while penetrating key mobile-first markets like Brazil and Indonesia.
Investing in mobile technology
Baidu has invested millions of dollars in technology companies, making a strategic investment in Taboola in May of this year. Taboola generates content recommendations that appear at the end of articles, a technology that could be used to build a knowledge graph for Baidu. (Interestingly, Taboola is the third Israeli tech company Baidu has invested in recently.)
But even more important is Baidu’s investment in artificial intelligence.
In May of 2014, Stanford Computer Science professor Andrew Ng joined to become Chief Scientist at Baidu Research, with labs in Silicon Valley and Beijing. Professor Ng is the co-founder of Coursera, the online education platform. But he may be best-known for a deep learning AI project that he ran with Google, wherein they built a network of neural processors that watched thousands of hours of unlabeled Youtube videos. Entirely on its own, without any human direction, the neural network learned how to identify … cats (it was YouTube after all).
By continuing to improve this deep learning technology, Baidu will leap ahead in its ability to analyze speech data and written language in Chinese, English, and any other language. And Baidu is already planning an enhanced supercomputer for 2016 that will greatly improve its capabilities in object recognition.
What are the search implications of this technology?
We need look no further than a new Baidu project called Baidu Eye. Working in tandem with your smartphone, Baidu Eye is designed to enable you to identify a product you see and instantly provide pricing information, so that you can purchase it on the spot if you wish.
Professor Ng has been careful to describe Baidu Eye as a “research exploration” not a product, but it fits neatly into Baidu’s vision of the future. Ng predicts that “Within five years, 50% of our queries will be through speech and images" not just text.
In other words, the picture becomes the query. And image search becomes the key to massive profits in sophisticated markets as well as markets where a high percentage of the population is barely literate.
Opportunities far beyond the Great Firewall
Today more than 93% of Baidu’s visitors are in China, but Robin Li and his management team are looking far beyond the nation’s borders. In 2014 Baidu started operations in Brazil, a mobile-first country where Ng’s new technologies may deliver a decisive advantage.
Baidu has also moved aggressively into Indonesia, another mobile-first market. In Indonesia, Baidu is not starting with a search engine, rather it is importing Android apps from China that have proven to be quite popular locally. And Baidu is also running pilot projects in Thailand and Egypt.
So here’s the formula – create the world’s best mobile technology for processing speech and images, and deploy it in markets where mobile is dominant. Only time will tell if Baidu is on the right path, but this certainly appears to be a bold leap into the future for China’s leading search engine.